How to build prosperity and society

Aug 11 2009 Sarah Green, Regional Director, CBI North East

A STRONG, stable economy cannot be built on debt. In the past decade growth has been fuelled by increases in government and household spending, both dependent on debt.

What we now need is growth driven by business investment and trade. This can only be achieved with more emphasis on manufacturing. With its tradition of manufacturing the North East is in an excellent position to capitalise on this, but we need policies to ensure it happens

There are opportunities for the sector. A competitive exchange rate supports UK manufacturers in export markets, and gives UK goods an advantage over imports at home.

There is also huge scope for infrastructure development over the next 20 years. For example, the transformation of our power generation is needed urgently.

The North East is already at the forefront of this revolution, playing a pivotal role in developing offshore wind and innovating in biomass energy, photovoltaics and clean coal.

We now need to ensure we capture the intellectual property and high value jobs connected to this infrastructure investment. This depends on locating the manufacturing supply chain here.

As well as being good for general economic growth, leading to better living standards, manufacturing also holds the key to social cohesion. Manufacturing now employs twice the proportion of graduates it did in the mid-1990s.

This highly skilled workforce has enabled the UK to establish itself as a world leader in high value manufacturing, second only to the US as the preferred location for hi-tech foreign investment. The life sciences and pharmaceutical and sector is an example of high value manufacturing and one in which North East research is globally renowned.

Recent news on a technique to grow sperm from embryonic stem cells as well as continuing innovation on neuromuscular disease show our expertise.

It is now critical we maximise the commercial opportunities linked to our world-class research base to create highly skilled jobs here.

The government needs to act as a catalyst for change and work in partnership with business, allowing the region to apply its heritage and skills base to new markets, including the demand for low carbon goods.

At every point the region needs to ask, “How are we adding value to this process?” and, “What is being created here that would be difficult to replicate in other parts of the world?”

The importance of manufacturing is clear; all that remains is to decide on policies to shape our future.

Sarah Green is regional director, CBI North East